Closure Experiences are often locked to the moment of transaction in some way. A power relationship is established at the moment of transaction. This can be a balanced, fair distribution of power between supplier and consumer. Or can be a tyrannical power relationship, where the consumer is a weakened party by paying before delivery of a service. Or can provide the consumer with influence and authority, when the consumer pays after delivery.
Payment after delivery
This holds the possibility of empowering the customer, as potentially they can negotiate the price on the quality of the service delivered. These transactions often have higher customer contact, potentially a single individual being the executor of the service, such as a waiter. The payment may act almost like a reward, attended by the possibility of a gratuity.
Incidentally, people in these types of jobs have highest job satisfaction, according to a City and Guilds survey hairdressers and plumbers come up tops. This suggests a strong link between job satisfaction and having the transaction at the end of the service delivery. The interpretation of quality or satisfaction with the work becomes a discussion to be resolved with the customer. From this conversation service providers have to accept criticism and ultimately correct anything that goes wrong. The result is pride and belief in their work through constant feedback and improvement.
Payment before delivery
Limits the ability of the customer to negotiate if a service has been poor and therefore leaves little opportunity for the service provider to get feedback and improve. Often seen in entertainment services, travel services and education. The customer is paying for access to the service. The opportunity to have an frank discussion with the service provider is rare in these transactions. The customers would usually have to make effort to have their complaints heard, possibly through some formal systematic way that further distances the service from the customer.
The band Radiohead disrupted the model of payment with their album Rainbows by asking customers to pay what they thought was appropriate. http://en.wikipedia.org/wiki/In_Rainbows It would have been interesting to extend this to their tour tickets and have the entertainment industry’s transaction model challenged with a more open alternative.
The customer considers the service a basic / hygiene level need and wants to give minimum attention to the transaction. Often used by utility companies and banks, who encourage their customers to pay via direct debit. Due to the low customer engagement with this type of service, providers often become complacent with the customer relationship. This is evident in the press coverage these companies get for their customer service,some of which suggest a shocking level of customer contempt in the industry. This shouldn’t be surprising, given the distance from the customer. The style of transaction is essentially automated and leaves little opportunity to review quality with the customer.
Digitising services has increased the use of synchronous transaction. For example, ‘pay-as-you-go’ services are digitised and use of them are increasing in many sectors. RFID cards are facilitating more synchronous transactions. Its a very transparent form of transaction and one that respects both provider and customer equally; creating a healthy end to the service.
Is a new version of transaction model. Used by many of the free digital services we use, like Facebook, Google and others. Through agreeing to their T&Cs we agree to share our data, behaviour, location for example with them. Although we see many perceived benefits as consumers, there is a great deal we give up in terms of privacy.
The transaction model is a very powerful tool. Often under-considered in terms of how to engage with customers. Many service providers use a model because historically that is what was used. They fail to question if it is the right thing for the future.
Service providers should look to changing their transaction models to improve their Closure Experiences and, in turn, their relationship with their customers.